Zee Ent fails to get shareholders' majority for preferential issue

Zee Entertainment Enterprises (ZEEL) fails to get the required 75% approval for a Rs 2,237 crore preferential issue to the Subhash Chandra family

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The shareholders of Zee Entertainment Enterprises (ZEEL) rejected a proposal to raise about ₹2,237 crore via a preferential issue of convertible warrants to the founder Subhash Chandra family in an extraordinary general meeting (EGM) conducted on Thursday.

 

According to the stock exchange filing, 59.51 per cent of the total number of valid votes were cast in favour of the resolution, while 40.48 per cent were cast against it. The resolution required 75 per cent approval to pass. The board had earlier cleared the proposal for the Subhash Chandra family to increase its stake in the company from 4 per cent to 18 per cent.

 

“The board and the management of the company have noted that about 60 per cent of the shareholders who participated in the voting process expressed their support for the resolution pertaining to the issuance of fully convertible warrants to promoter group entities, and we are grateful for their support,” said the company’s spokesperson in a statement. “The board and the management also respect the decision taken by the remaining shareholders. Maximising and safeguarding shareholder value has always been a core area of focus for us.”

 

The statement further added, “Under the guidance of the board, the company has made significant efforts to enhance performance and profitability in key areas such as improving the margin profile and reducing losses in the digital segment. The company continues to progress swiftly toward realizing its ambitions by leveraging its cash reserves, prudent approach, and entrepreneurial spirit.”

 

While the company had not specified the exact use of the funds, an investor presentation released in May highlighted that ZEEL was exploring value-accretive merger and acquisition (M&A) opportunities in pursuit of scalable growth.

 

“While the efforts being taken have worked well for the company, it is important to keep a sufficient war chest available to consistently build a strong foundation to address rapid market shifts and outperform fierce competition. The company remains guided by a highly experienced board to fortify itself against unforeseen events and deliver growth while investing in technology and innovation,” the spokesperson stated.